Luxury furniture retailer RH (NYSE: RH) beat Wall Street’s revenue expectations in Q1 CY2026, but sales fell by 1.7% year on year to $800.3 million. On the other hand, next quarter’s revenue guidance of $912.6 million was less impressive, coming in 3.5% below analysts’ estimates. Its non-GAAP loss of $1.97 per share was 4.9% above analysts’ consensus estimates.
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RH (RH) Q1 CY2026 Highlights:
- Revenue: $800.3 million vs analyst estimates of $792.6 million (1.7% year-on-year decline, 1% beat)
- Adjusted EPS: -$1.97 vs analyst estimates of -$2.07 (4.9% beat)
- Adjusted EBITDA: $56.91 million vs analyst estimates of $48.27 million (7.1% margin, 17.9% beat)
- Revenue Guidance for Q2 CY2026 is $912.6 million at the midpoint, below analyst estimates of $945.9 million
- Operating Margin: 4.3%, down from 6.9% in the same quarter last year
- Free Cash Flow Margin: 1.7%, down from 4.2% in the same quarter last year
- Market Capitalization: $2.81 billion
Company Overview
Formerly known as Restoration Hardware, RH (NYSE: RH) is a specialty retailer that exclusively sells its own brand of high-end furniture and home decor.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
With $3.43 billion in revenue over the past 12 months, RH is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers.
As you can see below, RH struggled to increase demand as its $3.43 billion of sales for the trailing 12 months was close to its revenue three years ago. This was surprising given it opened new stores to expand its reach.
This quarter, RH’s revenue fell by 1.7% year on year to $800.3 million but beat Wall Street’s estimates by 1%. Company management is currently guiding for a 1.5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 8.2% over the next 12 months, an acceleration versus the last three years. This projection is commendable and suggests its newer products will catalyze better top-line performance.
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Store Performance
Number of Stores
A retailer’s store count influences how much it can sell and how quickly revenue can grow.
RH opened new stores quickly over the last two years, averaging 2.4% annual growth, faster than the broader consumer retail sector.
When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.
Note that RH reports its store count intermittently, so some data points are missing in the chart below.
Same-Store Sales
The change in a company’s store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales is an industry measure of whether revenue is growing at those existing stores and is driven by customer visits (often called traffic) and the average spending per customer (ticket).
RH’s demand has been spectacular for a retailer over the last two years. On average, the company has increased its same-store sales by an impressive 3.8% per year. This performance suggests its rollout of new stores is beneficial for shareholders. We like this backdrop because it gives RH multiple ways to win: revenue growth can come from new stores, e-commerce, or increased foot traffic and higher sales per customer at existing locations.
Note that RH reports its same-store sales intermittently, so some data points are missing in the chart below.
Key Takeaways from RH’s Q1 Results
We were impressed by how significantly RH blew past analysts’ EBITDA expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter missed. Overall, this print had some key positives. The stock traded up 3.3% to $164.76 immediately after reporting.
So do we think RH is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
